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TSX, ASX: AVM
Common shares outstanding 71.1 million
All amounts are expressed in US dollars, unless otherwise stated.
MONTREAL, Feb. 19 /CNW/ - Anvil Mining Limited (TSX, ASX: AVM) ("Anvil"
or the "Company") announces that it has now received letters from the Minister
of Mines for the Democratic Republic of the Congo ("DRC") notifying Anvil of
the Government's position as a consequence of the review by the DRC Government
of the mining rights which Anvil's subsidiaries hold in respect of Anvil's
Kinsevere and Kulu mining properties. On February 19, Anvil announced the
details of the Government's position with respect to Anvil's Dikulushi
property. Anvil has majority interests in and operates the Dikulushi
copper-silver mine, the Kinsevere copper mine and the Kulu copper tailings
operation, all in the Katanga Province of the DRC.
The office of the Minister of Mines has also advised Anvil that the
deadline for responding to the Government's position has been extended to
February 27, 2008. Anvil will shortly submit a response to the letters
received from the Minister of Mines in respect of all three of its properties
in the DRC and will seek discussions with the Minister of Mines. Further
details of the letters received in respect of Kinsevere and Kulu are set forth
below.
Kinsevere Mine
The mining rights to the Kinsevere project tenement areas are currently
held through a 25 year mining lease agreement between La Générale des
Carrières et des Mines ("Gécamines"), a Congolese para-statal entity that is
the mining title holder, and Mining Company Katanga sprl ("MCK"). MCK is in
the process of assigning the lease to AMCK Mining sprl, which is a joint
venture company owned as to 95% by Anvil and 5% by MCK.
The Minister's position is that the existing contractual arrangements
with Gécamines have financial terms that ought to be renegotiated. The
specific requirements stated by the Minister are that:
- the cash bonus paid to Gécamines should be increased to
$150 million,
- the ceiling on rent paid of a maximum of $70 per tonne of copper
equivalent should be removed and the contract altered to reflect
changes in metal prices,
- the term of the contract with Gécamines (which extends for
25 years) should coincide with the term of the underlying mineral
tenures, which have an initial term that expires on 3 April 2009
and which are renewable thereafter for successive periods of
fifteen years, and
- AMCK should submit to the Government a plan for social programs
that will have a visible impact.
Pursuant to the existing contracts in relation to the Kinsevere Mine, a
lease premium of $1 million has been paid by Anvil and there is no provision
for additional payments. Rent is payable on a sliding scale that varies with
the price of copper and is between $35 and $70 per tonne of copper equivalent,
with the maximum rent payable being reached at a copper price of $4,000 per
tonne. In addition, a 2% net smelter return royalty is payable to the DRC
Government pursuant to the Mining Code.
Kulu Mine
The Kulu copper tailings operation is an incorporated exploration and
mining joint venture between a subsidiary of Anvil, Entreprise Minière de
Kolwezi ("EMIKO"), and Gécamines. The mineral rights to the Kulu operation are
held under two principal tenements, both of which were originally in the name
of Gécamines and were transferred to Société Minière de Kolwezi sprl ("SMK")
in 2005 and 2006. EMIKO holds 80% of the shares of SMK and Gécamines holds the
remaining 20%.
The Minister's position is that the interest of Gécamines in SMK is
unfairly low, in part due to the absence of a feasibility study, and that the
joint venture must therefore be renegotiated. The specific requirements stated
by the Minister are that:
- a feasibility study be submitted which identifies the actual
contributions of the parties in order to establish a fair balance
of shares in SMK as between EMIKO and Gécamines,
- a royalty of at least 2% of gross revenue be provided in favour
of Gécamines,
- Gécamines must be actively involved in the day to day management
of SMK, and
- SMK should submit to the Government a plan for social programs
that will have a visible impact.
A feasibility study was submitted to Gécamines in 2005. The current
agreements with Gécamines provide for a 2% net smelter return royalty to be
paid to Gécamines. In addition, a 2% net smelter return royalty is payable to
the DRC Government pursuant to the Mining Code. The agreements governing SMK
provide that Gécamines has the right to appoint three of the eight members of
the management board of SMK and EMIKO has the right to appoint the other five
members. The President of the management board is to be chosen from the
members appointed by EMIKO and the Vice President of the management board is
to be chosen from the members appointed by Gécamines. In addition, the
position of General Manager shall be filled by a candidate presented by EMIKO
and the position of Assistant General Manger shall be filled by a candidate
presented by Gécamines.
Conference call
A conference call will be held at 8:00 a.m. (EST - North America, Toronto
time) on Thursday, February 21, coinciding with 10:00 pm (AWST - Australia,
Perth time) on the same day, to discuss the matters referred to in this news
release and Anvil's news release of February 19. Details to access the
conference call and the live audio webcast are as follows:
Conference call:
(Please call approximately five minutes prior to the scheduled start
of the call)
- Toll-free within North America: 1-866-250-4877
- For local and overseas calling: 1-416-644-3433
Live audio webcast of the conference call (listen mode only):
- CNW Group website in English at:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2174920
Replay Information (available for a period of 7 days):
- The conference call will also be recorded and a playback of the
call will be available after the event by dialling 1-877-289-8525
or 1-416-640-1917, Reservation number 21263759 followed by the
pound # key
Anvil Mining Limited is an unhedged copper and silver producer whose
shares are listed for trading on the Toronto Stock Exchange (as Common Shares)
and the Australian Stock Exchange (as CDIs) under the symbol AVM. It has
majority interests in and operates the Dikulushi copper-silver mine, the
Kinsevere copper mine and the Kulu copper tailings operation in the Katanga
Province of the DRC.
Note: As a consequence of the letters Anvil has received from the DRC
Minister of Mines, Anvil may be required to enter into discussions or
negotiations with the DRC Government and Gécamines regarding its rights
with respect to its properties in the DRC. No assurance can be given as
to the outcome of any such discussions or negotiations or that Anvil's
security of tenure and its ability to secure additional financing in the
future may not be adversely affected so as to have a material adverse
effect on its business, operating results and financial position.
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